2022 (10) TMI 194 - HC - Central Excise

Maintainability of appeal - appeal can be dismissed for want of non-appearance or non contest by the appellant/his counsel or not - Whether the Tribunal can dismiss the appeal without considering the merits of the case? - Section 35C of the Act and Rule 20 of the Rules - HELD THAT - On perusal of the said rules and upon placing reliance on Hon ble Apex Court judgment of BALAJI STEEL RE-ROLLING MILLS VERSUS COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS 2014 (11) TMI 531 - SUPREME COURT , it is absolutely clear that no exparte order of dismissal for non-prosecution can be passed by the Tribunal and the appeal cannot be dismissed for absence of appellant. The CESTAT is duty bound to decide the appeal on merits as Section 35C of the Act only enables CESTAT, which is a Statutory Appellate Authority, to pass the order on appeal either confirming, modifying or annulling the decision or order appealed against or it may remand the matter. The provision of Rule 20 of the CESTAT Rules gives the power to the Tribunal to set aside the dismissal and to restore the appeal, if sufficient cause for non-appearance is shown. The use of the work shall in the proviso to Rule 20 even casts an obligation on the Tribunal to restore the appeal. In the case in hand, it was the Tribunal which had taken up the appeal after six years of registration of the same. Counsel for the appellant was situated in Jaipur, the seat of the Tribunal was situated in Delhi and the impugned orders were passed after six years, only for his non-appearance. The matter was dismissed in default without any genuine reasons and opportunity. In the case in hand, the direct judgment of the Hon ble Apex Court referred in Balaji Steel Re-rolling Mills, was not considered and overlooked inspite of specific reference in the applications - Appeal allowed.

Summary

Issues:
1. Dismissal of restoration application by CESTAT.
2. Authority of the Tribunal to dismiss appeal for non-appearance.
3. Consideration of merits of the case by the Tribunal.

Analysis:

Issue 1: Dismissal of restoration application by CESTAT
The appellant filed an appeal under Section 35G of the Central Excise Act against the dismissal of a restoration application by CESTAT. The appellant raised substantial questions of law regarding the dismissal, citing the mandatory provisions of Rule 20 of CESTAT Rules and a judgment by the Apex Court. The Tribunal dismissed the restoration application without considering the merits of the case, leading to the appeal. The appellant argued that the dismissal was contrary to the law and principles of natural justice. The Tribunal's decision was challenged based on the statutory provisions and the settled dictum of the Apex Court in a specific case.

Issue 2: Authority of the Tribunal to dismiss appeal for non-appearance
The core issue revolved around the Tribunal's authority to dismiss an appeal for non-appearance or non-contest by the appellant or their counsel. The appellant contended that the Tribunal should not dismiss an appeal without considering the merits of the case, as mandated by Section 35C of the Act. The appellant cited a judgment by the Apex Court emphasizing that the Tribunal must not dismiss an appeal in an ex-parte manner without discussing the case's merits. The Tribunal's dismissal of the appeal without proper consideration was challenged based on the rules and principles governing the Tribunal's actions.

Issue 3: Consideration of merits of the case by the Tribunal
The Tribunal's failure to consider the merits of the case due to the appellant's non-appearance was a critical point of contention. The appellant argued that the Tribunal's decision was unjust as it did not fulfill its duty to decide the appeal on its merits. The appellant highlighted the obligation of the Tribunal to restore the appeal if sufficient cause for non-appearance is shown, as per Rule 20 of the CESTAT Rules. The Tribunal's dismissal in default without genuine reasons or opportunity was challenged, emphasizing the need for a fair consideration of the case based on the statutory provisions and established legal principles.

In conclusion, the High Court allowed the appeal, setting aside the orders in default and restoration application. The matter was referred back to the Tribunal for a fresh consideration of the appeal on its merits. The Court directed the Tribunal to uphold judicial decorum, follow the principles of judicial discipline, and consider the relevant laws and judgments, particularly those cited by the appellant. The Court emphasized the importance of adhering to statutory provisions and ensuring a fair and just process in appellate proceedings.